The Housing Bubble

Fed’s Fisher Forecasts Steep Contraction in U.S. GDP…

April 14 (Bloomberg) — U.S. Federal Reserve Bank of Dallas President Richard Fisher said “grim” figures indicate the world’s largest economy shrank steeply last quarter.

“The economic data in the U.S. is quite grim, and I expect a contraction at a very dazzling rate in the first quarter,” Fisher said in a speech today in Hong Kong. He reiterated his prediction that the jobless rate may exceed 10 percent this year.

The bank president’s remarks come as U.S. policy makers continue an unprecedented campaign to increase the money supplied to the economy. Fisher, 60, is among the most hawkish members of the Federal Open Market Committee, having voted five times last year in favor of tighter policy.

The central bank’s policies are likely to help end the U.S. recession, Fisher said in the speech at a luncheon sponsored by the Asian Society of Hong Kong. Government stimulus measures should also start to have an impact on the world’s largest economy from the second quarter, he said later in an interview with Bloomberg Television.

The U.S. economy shrank at an annual 6.3 percent pace in the final three months of 2008, the worst performance since 1982. A report later this month will show gross domestic product fell an annualized 5 percent last quarter, according to the median estimate of 74 economists surveyed by Bloomberg News.

1819: America’s First Housing Bubble

Mises Daily by C.J. Maloney | Posted on 4/7/2009 12:00:00 AM
Panic of 1819
“Asset bubbles all have a few things in common.
First and foremost, they end badly.”
– Caroline Baum (2005)

With little interest in and even less knowledge of history, the modern American finds anything he considers tragic to be an utterly new crisis of unfathomable proportions and, as befits a great nation, one completely new to mankind’s historical experience. As any patriotic American knows, we ooze uniqueness.

Yet, despite Congressman Barney Frank’s blubbering insistence that our nation’s current financial mess is a “new phenomena,” today’s “housing/credit/confidence crisis” is anything but. Our ancestors had already seen all the broken dreams and ignorant greed surfing high on a wave of paper money and hollow credit — more than once before. The America of 1819 and the financial panic its citizens experienced was only the first of what is America’s true national pastime: speculative mania.

Examining how the men of 1819 responded to the crisis and, most importantly, what the results of their actions were, may give us an idea or two (or none) to help solve the current crisis. Should we solve it — and I have no doubt that we will — then we can write down our own warnings, born of harsh experience, so that generations not yet born may completely ignore them too.

http://mises.org/story/3395

The banker men post record profits, but life for many in the trenches is bleak.

What’s the logic here? Hope that a bank/market paper recovery spurs consumer spending and “creates” jobs?

Or are they totally clueless and we’re stumbling towards an epic blowout?

Is Goldman Sacks above the First Amendment?

More generally, is Megabank, Inc above the Law of the Land?

Goldman Sachs Profits Don’t Ease Blog Headache
Goldman Sachs Wants Angry Blogger to Cease and Desist
By ALICE GOMSTYN
ABC NEWS Business Unit
April 14, 2009

Goldman Sachs is locking horns with a blogger, who is determined to draw more public scrutiny to the investment giant.

Florida blogger Mike Morgan, who runs the Web site goldmansachs666 dog com, says the investment giant Goldman Sachs doesn’t “want the truth out there.”

Lawyers for Goldman, which yesterday reported better-than-expected profits of $1.66 billion for the first three months of 2009, last week sent a cease-and-desist letter accusing Florida blogger Mike Morgan of trademark infringement and violations of the firm’s intellectual property rights because of Morgan’s Web sites: goldmansachs666 dog com and goldmansachs13 dog com. In turn, Morgan filed a lawsuit against Goldman in U.S. District Court Monday, asking the court to declare that he is using his domain names legally.

Morgan’s goldmansachs666 dog com site includes posts with such titles as “Is Goldman Sachs Manipulating the Stock Market? — It Sure Looks Like It” and “Did Goldman Sachs Scam the System with AIG?“

What is the difference between Wall Street bankers and Somali pirates, aside from (1) the bankers make lots more money, and (2) the bankers have government protection?

Ok Cat, voz, and any other traders, a question:

Banks are going nuts again today. Have I/we actually missed something here, or will I eventually be rewarded for patience?? I don’t know what to think these days.

Thanks.

Manhattan Apartment Rents Fall as Unemployment Rises (Update2)
By Oshrat Carmiel

April 13 (Bloomberg) — Manhattan apartment rents fell as much as 5.9 percent in March from a year earlier as a record jump in unemployment damped demand, Citi-Habitats Inc. said.

Average rents declined for apartments of all sizes and the vacancy rate topped 2 percent for the fifth straight month, the New York-based property broker said today in an e-mailed statement.

Demand slumped after New York City’s unemployment rate climbed to 8.1 percent in February, the highest level since October 2003 and the biggest month-to-month increase on record. City Comptroller William Thompson predicted in March that New York City would lose 250,000 jobs before the recession ends.

“There are people who are unemployed, and people not willing to spend the type of money they were willing to spend before and they need to make tough decisions,” said Gary Malin, president of Citi-Habitats.

04.13.2009 4:09 pm
Missouri joblessness jumped almost half a percentage point in March
By Steve Giegerich
St. Louis Post-Dispatch

Led by the loss of an estimated 7,000 jobs in St. Louis, Missouri’s unemployment rate rose to 8.7 percent in March. February’s jobless rate, seasonally adjusted, was 8.3 percent.

The state Department of Economic Development estimates that 261,000 Missourians were out of work last month.
…
Missouri began the year with an unemployment rate of 8.1 percent.

More Americans wary of tax man this year…

WASHINGTON (Reuters) - As a deep recession strips Americans of their jobs, homes and investments, the 2009 U.S. tax season promises to see a large uptick in first-time delinquent income taxpayers.

“Our calls are up 280 percent,” said Richard Boggs, founder and chief executive of Los Angeles-based Nationwide Tax Relief, a firm that helps delinquent taxpayers resolve tax issues.

“We’ve seen a huge rise in what we call the rookie delinquent taxpayer,” he said. “They are incredibly scared, and they have no idea what’s going to happen to them because, God bless them, they’ve never owed before.”

As the weak economy puts job security and a steady flow of income on a slippery slope, many are wary of the U.S. tax man, tax consultants say.

With household balance sheets under pressure, more U.S. households are having trouble keeping up with their day-to-day bills and struggling to pay their taxes.

“Folks are not paying their taxes because they are spending it on necessary living expenses,” said Kristin Lavieri, an accountant with Weinstein & Anastasio, PC in Hamden, Connecticut.

She added that more of the self-employed, who are required to pay taxes each quarter, are likely to end up with back taxes. “When there is not enough money for general operating expenses, there most definitely isn’t going to be enough for quarterly estimates,” Lavieri said.

Among those not self-employed, many also have to make tough decisions that could carry long-term financial consequences.

Many withdrew funds from 401k and IRA retirement savings accounts before the permitted time, unaware of the punitive taxes and penalties this would generate, said Larry Walker Jr, president of the financial and tax services firm 4-Serenity Inc in Snellville, Georgia.

Withdrawals from a retirement account before reaching the age of 59.5 are considered taxable income and generally incur an additional tax of 10 percent of the amount.

Other taxpayers did not have enough tax withheld from paychecks. As a result, they now owe taxes or will not receive the amount of refund they usually do, Walker said.

http://preview.tinyurl.com/c4q3l3

Article from MarketWatch.com

HONG KONG (MarketWatch) — China’s property market will likely fall by 40% to 50% in value during the next two years, as transaction activity subsides and as the export sector continues to slump, according a senior Chinese economist quoted in a report Tuesday.

Cao Jianhai, a professor at the Chinese Academy of Social Sciences, told the Financial Times newspaper that the current rebound in the property market was unsustainable and driven by a flood of liquidity and fraudulent activity rather than real demand.

Cao was quoted in the report as saying average housing prices are now 10 to 12 times the average income. As a result, about 60% of a homebuyer’s monthly income must to go to mortgage repayments, Cao said.

Congrats, graduate - good luck finding a job
Justin Gillett, (San Francisco) Chronicle Staff Writer
Tuesday, April 14, 2009
…
A recent poll by the National Association of Colleges and Employers found that 22 percent of college recruiters do not plan to hire any fresh graduates this spring, and 43.6 percent said they’ll hire fewer graduates than they did last spring. About 174 businesses responded to the survey, including employers such as Santa Clara technology company Applied Materials Inc., Macy’s department store and brokerage firm Edward Jones.

“The current expectations for college hiring are not promising for the class of 2009, and the prospects for the class of 2010 point in the same direction,” the report said. “The economic recession that has gripped most of the world for the past year is now thoroughly reflected in college hiring expectations.”

Banking industry pirates have a friend in Bloomberg.

Much Vilified, Financial Titans Find a Friend in Bloomberg
By DAVID W. CHEN
Published: April 13, 2009

Gov. Jon S. Corzine is suing Lehman Brothers, saying the firm shortchanged New Jersey’s pension funds. Most members of New York’s Congressional delegation pushed for a 90 percent tax on American International Group bonuses. Politicians in Albany and beyond have pushed through income tax increases on the wealthy.

On “Meet the Press” in March, Gov. Arnold Schwarzenegger of California, left, criticized bonuses at American International Group; Mayor Michael R. Bloomberg was more circumspect.

Declaring that “we love the rich people,” Mr. Bloomberg has opposed capping executive pay, increasing the capital gains tax or raising income taxes on the wealthy. He has gushed about Treasury Secretary Timothy F. Geithner, saying he “walks on water,” and praised Henry M. Paulson Jr.’s Goldman Sachs résumé.

Mr. Bloomberg, a billionaire many times over, has also vouched for vilified Wall Street titans like Richard S. Fuld Jr., the former chief executive of Lehman Brothers.

“There’s Lehman Brothers, who I feel very sorry for,” he said during a news conference. “Dick Fuld, I’ve known for 40 years, who’s a competent guy, and people are criticizing him. They didn’t criticize him when things were going well for an awful lot of years.”

Mr. Bloomberg has emerged as perhaps the foremost defender of the financial industry in the political world, while other elected leaders seize on the populist anger over the economy and executive compensation.

To the financial community, Mr. Bloomberg’s support is refreshing, and his refusal to hop on an antibusiness bandwagon underscores his understanding of economic realities.

But to others, Mr. Bloomberg’s position suggests he is too cozy with his business-class brethren. He also runs the risk of seeming oblivious to the hurts and wants of the typical New Yorker.

“When the economy is bad, people are angry, and they look to politicians to mirror that anger, and it creates a problem for Bloomberg because he cannot be an ‘I feel your pain’ candidate,” said Kenneth Sherrill, a political science professor at Hunter College. “I think he’s gentler on people in the private sector on whom, in his view, the city is dependent. He just holds his tongue.”

Florida and tax evasion…

“In another cited case, a Florida yacht company accountant — Steven Michael Rubinstein, 55, of Boca Raton — last week became the first U.S. citizen charged with filing a false tax return in a federal investigation into wealthy citizens who hid assets from tax collectors in the Swiss bank UBS.

That’s just the latest UBS event in Florida’s courts. In January, authorities here charged Raoul Weil — a senior executive with UBS — with conspiring to hide $20 billion in assets from the IRS using secret overseas accounts for thousands of customers.”

http://www.tampabay.com/news/business/personalfinance/article991946.ece

California Home Sales Tank Filling but the Trend Still Leaks
April 13, 2009

* Analysis by: Jack Kern
* Analysis of: Signs of life in California real estate
* Published at: money dot cnn dot com

Implications

Oh those clowns at CNNMoney.com are at it again… California has become the poster child for housing excess, with foreclosures leading the nation and entire neighborhoods comprised of empty tract homes. Recently the California Association of Realtors announced that the median home price has fallen to $247,590, a 41% decline from a year ago. Not surprisingly the vulture investors are picking over the carcass’ of the far flung suburbs looking for deals, and beyond surprise home sales jumped by over 600,000 homes. CNNMoney promptly jumped to the assertion that the CA housing bust may be over. I do believe one of these days they’ll get it right, but not this time.

Analysis

OK, so here’s the real story.

California had delivered a number of units that were purchased by speculators and during the time horizon of 2005 to 2007, vast numbers of homes were acquired, flipped and resold until the party ended by the early part of 2008. The units that went first into foreclosure and then to REO were almost always empty units and with the collapse of housing markets assuring that a ready supply of homes existed, it was only a matter of time, well reported by every other responsible news organization that prices would decline and speculators and first time purchasers would move in. That’s what is happening now. But once these cheap, speculator units are absorbed, and it will happen quickly, the real issue represented by the higher priced homes in more stable neighborhoods will once again illustrate the depth of the problem and California’s housing and foreclosure crisis will then remain in the news for quite a while longer.

The reality of home sales volumes being driven by new purchasers with real down payments and qualifying incomes leaves the California market in the same position as the rest of the nation, and neither speculator volume or CNNMoney will ever change that.

Well… They better find some way to pay their taxes or there will be serious consequences:

1) No more bailouts for large multi-national corportations

2) Nancy Pelosi and Barney Frank will not get paid and might quit

3) Wall St bonus size will diminish and banks could lose talent

4) Gas-guzzling, poorly made, ugly cars won’t be available

5) Hedge Fund managers will work at McDonalds and screw up your order in the drive-thru

Since Goldman Sachs is in a repaying mood, is there any chance they might agree to repay their AIG jackpot winnings, in addition to the TARP funds?

http://seattletimes.nwsource.com/html/businesstechnology/2009031937_aplaidofflawyers.html

even lawyers are not immune to unemployment which means potentially their homes too.

Bernanke sees ‘tentative signs’ of improvement
Bernanke: ‘tentative signs’ recession may be easing; recovery hinges on financial stability… Jeannine Aversa, AP Economics Writer
Tuesday April 14, 2009, 9:28 am EDT

WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke said Tuesday there’s been “tentative signs” that the recession may be easing. But he also warned that any hope for a lasting recovery hinges on the government’s success in stabilizing shaky financial markets and getting credit to flow more freely again.

Specifically, the Fed chief mentioned improvements in recent data on home and auto sales, home building and consumer spending as flickering signs of encouragement.

“Recently we have seen tentative signs that the sharp decline in economic activity may be slowing,” Bernanke said in remarks prepared for students and faculty at Morehouse College in Atlanta.

“A leveling out of economic activity is the first step toward recovery. To be sure, we will not have a sustainable recovery without a stabilization of our financial system and credit markets,” he said.

But the Fed is “making progress on that front as well,” Bernanke said, and will keep working to ease financial and credit stresses so those markets operate normally.

To revive the economy, the Fed has cut a key bank lending rate to a record low of near zero and has rolled out a number of radical programs to spur lending to Americans, a key ingredient to turning around the economy.

On that front, the Fed recently plowed $1.2 trillion into the economy in an attempt to reduce interest rates for mortgages and other loans.

So I’m a little freaked out. I’ve been reading many things here about the bubble starting in the mid-90s. What freaks me out is that I was in high school then, meaning most of my adult employment was bubble-related.

I worked on ads for a lot of financials in early 00’s. Does that mean if PRU goes bust, and gets bailed out, that I essentially received TARP timewarp money in 2002?

I know where I stand with education; it’s likely that both my wife and I will be jobless, which may propel me back into the music business. How weird is that?

Well, lets see…1.5″ of snow fell on our tent on Friday & Saturday in the Mid-Hills campground in the Mojave desert…spectacular! Mr. Cole & I caught the 4th longest trout in the fishing derby. Saw a red-tail hawk trying to gain altitude with a snake in its claws, but was unable to and settled for the side of a small hill (big snake). Saw x2 roadrunners… Mr Cole had a “conversation” with an owl for 45 minutes..got a piece of old “Route 66″ from the Goffs school museum.

Oh yeah, Needles CA…still looks exactly the same as 25 years ago…1-2 room crap houses & 115 degree heat in the summer Their grocery store has improved & they have a new $ Dollar store.

Barstow has promise 10 million people in Southern Calif with x2 automobiles & Interstate 15 to “lost Wages” NV…and no train route competition…(gas wast apprx $2.39). Along with the China Lake Naval station to the north, The Marines & Army to the south…BNSF & Union Pacific in the center of town… they ought to “ride out” the “Global” retraction just fine.

Encountered the “usual suspects” camping: $175,000 RV pulling a Honda car…x2 college kids who forgot to bring the propane canisters…but mostly young folks just checking out that part of the great American environment & 50+ year olds who had some money, some time, & a wee bit of curiosity still left in their aging bones.

I see our world is still counting on the constancy of 8 minutes travel time of tossed solar radiation…what fools we all are. Now, about that drought that is going to cause Californian’s to become totally dependent upon Gatorade & sell their ski’s & snow boards on eBay…well, perhaps it ain’t necessarily so…

Thanks Ben and all y’all. Relocated the family to Tx from CA after starting on this blog.

Believe it when you hear CA still has craziness. Mom passed late last year. Mom was a neat freak and the siblings and I finished some projects she had going around the house so it showed well. Used a real estate agent referred to us (with a negotiated commission) who worked with us on price. College town, good location, cash offer at 95% of list in 5 days with settlement costs split & as obvious, no seller giveback which the agent said seems to be standard in the area to get to loan closings now. Didn’t bother to counter on price. Closed last week.

BTW, I’m a native Texan, and encourage all y’all to stay where you are now and quit crowding us up down here.

Remember to tip the bartender!

So what does Lehman Bros, Starmucks, Krispy Kreme, Merril Lynch, Hardley Davidson, New Century, Countrywide ( choose your own favorites) all have in common?

Fond memories of April 1st… 2007

Retail sales for March below expectations, thus market down as a result.

Here’s a stat (I first quoted last week) I’m going to harp on over and over again, as the “economists” are somehow surprised that the recovery doesn’t happen when they expect.

Homeowner equity rate in 2003: 57.4% (and flat)
Homeowner equity rate in 2008: 43.0% (and falling very fast)

Learn it. Live it.

No recovery around the corner.

Curiouser & curiouser said the White Rabbit:

Filed under: “Interesting job in a global market of 6+ Billion peoples”

“…John Coates, a senior research fellow in neuroscience and finance at University of Cambridge in the U.K”

Toxic Testosterone Crunches Need a Female Touch: Susan Antilla
April 14 (Bloomberg)

I’m thinking we should have an additional 1$/gallon gas tax. Would really kink consumption of oil downward and put a dent in consumption. Make the green folks happy too.

We are concerned about our trade imbalance and debt here. One of the major components is oil. We start steeping in 1$ and then 2$ per gallon taxes and consumption of oil drops pretty fast, see last year in the commodities bubble. Heck, might go for three dollars per gallon.

http://www.msnbc.msn.com/id/29976394

This is a great visual with a sliding time line for determining the genesis of the bubble in your own demographic area.

The greatest part about this is watching the percentage losses just beginning in Fall08 and accelerating each month up to now.

Read it and weep RealTards.

It seems as though the stock market cannot even begin a good ole fashioned route any more these days before the PPT jumps in to the rescue.

Now we have the answer it the stress that made Wall Street efup. Pretty soon they will name a disease for this condition then come up with a drug and use this condition in trials to acquit scamming banksters.

The psychologists found that exposure to stress led participants to choose riskier decisions when trying to decide between taking a minor loss or a major one. The reverse proved true with gains.
One potential explanation for the effect might be that the human brain has two ways of looking at the world, an analytical one and an intuitive one. The analytical one is more easily disrupted by outside stimuli, such as stress. The intuitive one cuts to the bottom line when times are tough.

http://www.economist.com/finance/displayStory.cfm?story_id=13447720&source=hptextfeature

Ben is citing hopeful data on home sales, homebuilding and consumer spending. I don’t think it is hopeful yet. The economy has not bottomed out. I think ther is more pain ahead. Can somebody straighten me out on this one?

Bernanke sees signs of recovery
By Alan Rappeport in New York
Published: April 14 2009 13:55 | Last updated: April 14 2009 15:24
Ben Bernanke, chairman of the US Federal Reserve, on Tuesday said in prepared remarks that he has seen “tentative signs” that the sharp decline in economic activity is slowing, citing hopeful data on home sales, homebuilding and consumer spending.
Mr Bernanke, in a speech to students at Morehouse college in Atlanta, will say that such a levelling out of economic activity is the first step toward a recovery, but that stabilisation of the financial system and credit markets will be crucial to making any recovery sustainable.

Reiterating his call for better financial regulation, Mr Bernanke will say that the US needs a system for “unwinding” too-big-to-fail companies in ways that minimise disruptions to financial markets.
Although fears of inflation have largely subsided recently, as demand has collapsed, Mr Bernanke will say that inflation risk remains when the economy begins to rebound.

“At that point, the liquidity that the Fed has put into the system could begin to pose an inflationary threat unless the FOMC acts to remove some of that liquidity and raise the federal funds rate,” Mr Bernanke will say. “We have a number of effective tools that will allow us to drain excess liquidity and begin to raise rates at the appropriate time.”

That process will require the Fed to eventually scale back its lending programmes as part of a strategy of “reducing policy stimulus”, once a recovery begins

http://www.ft.com/cms/s/0/10f7fa3e-28f2-11de-bc5e-00144feabdc0.html?nclick_check=1

How Goldman “hit” its earnings:

Goldman’s 2008 fiscal year ended Nov. 30. This year the company is switching to a calendar year. The leaves December as an orphan month, one that will be largely ignored. In Goldman’s news release, and in most of the news reports, the quarter ended March 31 is compared to the quarter last year that ending in February.

The orphan month featured — surprise — lots of writeoffs. The pre-tax loss was $1.3 billion, and the after-tax loss was $780 million.

Good job! Just switch the calendar cycle and hope the market doesn’t notice..

The presidents speech sounds like a preemptive strike before tomorrows tea parties. I did like the part how some people were tricked into taking out sub prime loans, nothing to do with greed.

Don’t let the Fed’s War on Savers stop your household from practicing financial prudence.

DAVID WEIDNER’S WRITING ON THE WALL
Payback by saving
Commentary: Stop helping bailout banks more than you already have
By David Weidner, MarketWatch
Last update: 12:01 a.m. EDT April 14, 2009

NEW YORK (MarketWatch) — Taxpayers are downright furious over the bailouts that have characterized Washington-to-Wall Street policymaking for more than a year. Rather than stewing, though, they can help themselves and send a powerful message to the bailout chieftains by doing something simple: saving more.

It seems silly that saving, something so universally accepted as good financial sense, is out of style. But it is.

The government is spending through a $787 billion stimulus bill. It encouraged us to spend our stimulus checks last year, and our tax refunds this year — if we receive any. They want us to buy American cars, buy American homes and buy, buy, buy until we say goodbye the recession.

Payback by Saving

http://finance.yahoo.com/banking-budgeting/article/106915/Payback-by-Saving?sec=topStories&pos=9&asset=&ccode=

latest news
Obama says we are not coddling Wall Street

PAUL B. FARRELL
Best strategy for long bear market 2010-2020
Bonds beat stocks by factor of 11 from 1981 to 2009, but can it continue?
By Paul B. Farrell, MarketWatch
Last update: 6:37 p.m. EDT April 13, 2009

ARROYO GRANDE, Calif. (MarketWatch) — Never buy stocks. Never. Unless, of course, you love gambling (and losing) at the Wall Street casino. Or you don’t mind making payments on your broker’s BMW. Or you just joined a monastery and just took a vow of poverty.
Otherwise, don’t buy. Stocks are losers.

At least that’s the only rational investment strategy you’ll come away with after reading economist and long-time Forbes columnist Gary Shilling’s analysis of the miserable performance of stocks during Wall Street’s recent bull/bear cycles, beginning with the election of President Reagan in the early 1980s.

And it gets worse when you project into the bear market predicted for the next decade, till 2020. Ergo, more tough times ahead for investors, possibly a sequel to the painful sideways bear of 1968-1982.

So I ask you: Knowing the history, why would anyone in their right mind invest in stocks? You’d be a fool, right?

Yes. But join the club. We are a nation of “those who cannot learn from history,” as the philosopher George Santayana once warned, so we “are doomed to repeat it.” Statistics prove that year after year America’s 95 million investors are indeed clueless fools, easily conned into buying stocks by what BusinessWeek once called the “Wall Street Hype Machine.”

I liked the speech.
SKF reacted quite well, CNBC hated it.

__

(SKF reacted quite well to words like “regulation” etc. It was entertaining to see both simultaneously)

The median CEO salary rose 7 percent in 2008. CEO perks at the companies surveyed also went up, nearly 13 percent to an average value of $336,246, according to the survey.

Of CEOs whose compensation increased, the average was $5.4 million, including salary, bonuses and stock options.

Still looking for some folks to test a firefox extension to aid in reading this blog before I make it available for public consumption. It’ll show you how many new comments there are for each blog post, and hilight them for you so they’re easier to find.

If anyone’s using Firefox and wants to be helpful, can you send me an email? drumminj yahoo.com.

It won’t hurt anything, and if it’s buggy you can just disable/uninstall it easily. To install all you have to do is drag a file onto the browser window….

Per a recommendation from this blog, I’ve started reading Atlas Shrugged by Ayn Rand. Started the last weekend so I’m only up to page 400.

Some of the ideas disturb me a little. So far it’s produced some mixed feelings within.

Would anyone here care to share their thoughts and feelings in regards to this book?

Try not to give it away as I’m only about 1/3 thru. Thanks.

This article made me think about FPSS’s post about the lady asking him for a quarter. How many more victims are out there?

Feds: Elderly NY churchgoers victims of fraud

NEW YORK (AP) — Five leaders of a New York City church have been charged with ripping off more than $10 million from elderly worshippers in a hedge fund scam.

Federal authorities allege the men purposely sought to exploit the trust of people “near and dear” to them at the church in Queens.

Court papers filed Tuesday say the defendants raised about $12.3 million in investments in two crooked funds on Long Island with false promises of up to 70 percent returns. They’re accused of losing $10.2 million.

Authorities also say the men raided the funds to pay for expensive meals, foreign travel and other luxuries. One purchase was a $200,000 Bentley.

They face up to 20 years in prison if convicted of securities fraud.

Personal bankruptcies way up.

“RALEIGH, N.C. (AP) - The number of U.S. businesses and individuals declaring bankruptcy is rising with a vengeance amid the recession, despite a three-year-old federal law that made it much tougher for Americans to escape their debts, an Associated Press analysis found.

“‘There’s no end in sight,” said bankruptcy lawyer Bryan Elliott of Hickory, N.C., who is working seven days a week and scheduling prospective clients a month in advance. ‘To be doing this well and having this much business, it is depressing. It’s not a laugh-a-minute job.’

“Nearly 1.2 million debtors filed for bankruptcy in the past 12 months, according to federal court records collected and analyzed by the AP. Last month, 130,831 sought bankruptcy protection - an increase of 46 percent over March 2008 and 81 percent over the same month in 2007.”

Singapore GDP plummets 20 percent in 1Q, marking record contraction amid export collapse

http://finance.yahoo.com/news/Singapore-economy-plummets-20-apf-14916260.html

Here is US GDP by industry.

http://www.bea.gov/industry/gpotables/gpo_action.cfm?anon=94463&table_id=23975&format_type=0

Where will the money, activity, jobs and focus move now that Line Item 50 is no longer our primarly growth market for the next few decades?

Goldman Sachs’s Viniar ‘Mystified’ by Interest in AIG (Update1)
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By Christine Harper

April 14 (Bloomberg) — David Viniar, Goldman Sachs Group Inc.’s chief financial officer, said he’s “mystified” by the interest investors and government officials have shown in the bank’s trading relationship with American International Group Inc.

“They’re one of thousands and thousands and thousands of counterparties and the results of any trading with AIG are completely immaterial to what we do,” Viniar said today in an interview. “I am mystified by this fascination with AIG.”

Goldman Sachs, the most-profitable securities firm before converting to a bank last year, received more cash from AIG after the Federal Reserve rescued it last year than any other counterparty. The company has said it was insured against any losses from AIG and it didn’t benefit from the government’s rescue of the New York-based insurer. The Treasury Department’s chief watchdog for the financial rescue program is investigating whether AIG paid more than necessary to banks.

Viniar told analysts today that any profits related to AIG in the January-to-March quarter “rounded to zero,” as most of the transactions were unwound before the end of the year. In an interview, he also said profits in December weren’t significant.

‘Rounded to Zero’

“I would never tell you that we didn’t book any profit, I don’t even know,” he said. “I couldn’t tell you with any counterparty that we booked zero, but I could tell you it rounded to zero.”

After AIG was rescued by the U.S. from collapse last year, banks that bought credit-default swaps got $22.4 billion in collateral and $27.1 billion in payments to retire contracts, the insurer said last month.

A new Gov’t priority list:

“A footnote attached to the report by the Homeland Security Office of Intelligence and Analysis defines “rightwing extremism in the United States” as including not just racist or hate groups, but also groups that reject federal authority in favor of state or local authority.”

http://www.washingtontimes.com/news/2009/apr/14/federal-agency-warns-of-radicals-on-right/

Rash Limpbaughs: “I want him to fail!”

FUBAR balance sheets and consumer foreclosures are one thing — but save the horse race by any means necessary! (Cue “Maryland, My Maryland” …)

Bankruptcy Fuels Fear Over Preakness

By THEO EMERY, New York Times
April 13, 2009

BALTIMORE — With just a month to go before the Preakness Stakes at Pimlico Race Course here, the bankruptcy of the company that owns the track and the race has unleashed a wave of distress among politicians and the public over whether Maryland could lose its cherished second leg of the Triple Crown.

On Monday the General Assembly passed emergency legislation authorizing the state to buy or seize the race course by eminent domain if necessary, declaring the Preakness “a sporting event of historical and cultural importance to the State of Maryland.”

When will they ever learn the consequences of zero down loans?????
Home buyers have to have skin in the game!

Congressman: Housing tax credit is working

DENVER (AP) — A Colorado congressman says an $8,000 tax credit for first-time homebuyers approved by Congress in this year’s stimulus package is starting to work and may be extended beyond Dec. 1.

Democratic Rep. Ed Perlmutter said Tuesday he has been getting calls already from homebuilders seeking an extension to the tax credit, which Congress approved earlier this year to rouse a stalled housing market.

Perlmutter talked about the homeowner tax credit as Colorado announced it will join other states in “fronting” the federal tax credit. That is, some first-time homebuyers who don’t have money for a down payment can borrow an interest-free sum from the state and then repay it with the federal tax credit they receive next year.

Colorado housing officials announced that first-time homebuyers could apply for up to $6,000 for a down payment and closing costs, with interest waived until the homebuyers receive their federal tax credit. Similar programs have been started in New Mexico, Missouri, Ohio and other states.

Colorado’s program — called JumpStart — will allow first-time homebuyers who make less than 115 percent of their town’s median income to receive up to $6,000 interest-free from the state.

Homebuyers could use that money for a down payment or closing costs, and it wouldn’t have to be repaid until the middle of next year, after they’ve presumably gotten the federal tax credit. Homeowners who didn’t repay the $6,000 by June 30 of next year would be charged interest on the loan.

http://finance.yahoo.com/news/Congressman-Housing-tax-apf-14924364.html

Would anyone care to comment on this listing?

6 Bed, 6 Bath | 5,622 Sq Ft on 2.29 Acres | MLS ID #F1803616

I’m being tempted.

25 MILLION a mile, nice work if you can get it!

California road projects
Caltrans adopts a list of 57 transportation projects totaling $625 million to be the first in line to receive federal infrastructure money.
April 14, 2009
Getting started in California

A list of 57 transportation projects totaling $625 million has been adopted by Caltrans as the first in line to receive federal infrastructure money. The projects include:

Highway projects ‘ahead of schedule and under budget,’ Obama says

$75 million to repave three miles of rough pavement on Interstate 710 in Los Angeles.

$50 million to help reconstruct Doyle Drive, the southern access to the Golden Gate Bridge.

$46.7 million to replace two aging bridges on Highway 99 in Merced County.

$17 million to rehabilitate a stretch of Highway 99 in Butte County.

$16.8 million to construct two new lanes on Interstate 805 in Chula Vista to ease traffic congestion.

$13 million to replace the Russian River Bridge in Mendocino County near Ukiah.

For a complete list of the 57 transportation projects that were adopted and allocated funding, visit: http://www.dot.ca.gov/

Today I saw my first 500+ pound woman in the subway.

I tried to estimate her diameter (via parallax - I was wearing sunglasses.)

Quite the good lil’ Boy Scout I am! Taking all that training at an early age to heart and applying it in a practical sorta way.

I don’t think she could’ve gotten up the stairs at my stop (too narrow.) There is no chance whatsoever of her being able to board a bus facing the front.

D

Bill to Clamp Down On Federal Reserve Gains Steam…

Rep. Ron Paul is pushing a bill (H.R.1207) that calls for the comptroller general of the United States to audit the Federal Reserve. And the bill is gaining steam as more members of Congress, both Democrat and Republican, sign on.

The bill is called the Federal Reserve Transparency Act of 2009, and it requires an audit of the Fed’s Board of Governors and the Federal Reserve Banks be completed and reported to Congress by the end of 2010.

The Federal Reserve is a government-established private entity that can enter into agreements with foreign central banks and foreign governments. However, no agency has oversight over the Fed and the Government Accounting Office is prohibited from auditing or viewing any agreements. So no one, except for the Fed’s Board of Governors, truly knows what’s going on there.

According to reports, Paul says every problem with the American economy from the Great Depression to the current crisis results from Federal Reserve policy. It’s true. The Fed’s manipulation of money has led to inflation and a devaluation of the dollar that’s robbed the American people of their wealth.

I’m coming to the conclusion that the besetting design flaw of us semi-evolved bald monkeys is this: ‘no ability to be contented’.
Yes, really!
I ran into my neighbor today at the mailbox up on the road and he invited me over to see his new remodeling endeavors, so I politely went and I did behold his remodeling efforts. Lots of nice and shiny wood things, and a new carpet, and verily, other remodeley thingies, like on the teevee. The new things were like the old things. Maybe a tad different in teensy ways, indiscernible to my simple eyes.
He’s an older man, has money— partly ’cause he’s local and his parents bought some rentals about 60+ years ago and they are profitable— he’s retired, and is a hermit, and his wife is hermity, as are most of my neighbors.
Oh—I mentioned this neighbor before, in the context of his freakishly green and tidy lawn.

Look–I live in the forest. I tell you guys about this frequently, and it is a wonderful forest. Great big dark giant moss-drippy trees, ferns, frogs (like I’d forget to mention the frogs, as if) And I walked a long hard mile to get here, to this forest, because I wanted to LIVE IN THE FOREST, and here I am? In the forest!?
And this guy mows the freakin’ crap out of it! And persists in killing the moss and then planting grass strips, and he’s not winning, is the funny part. He’s planted grass at least 3 times to my knowledge, and it turns back into moss. And the moss is green and short, but evidently not what he wants, because he keeps planting grass.
And he plants marigolds in ruler-straight rows, and incessantly remodels his house, because he can’t think of anything else to do. Wha…? Huh…? Ahhh…?

Anyway, I’m standing there looking at new stuff, same as the old stuff, and making polite sounds out of my face and thinking inside my head, “Man! You are so sillyyyyyyyyyy!
Is this what we do with our time and opposable thumbs?”
Because it seems like a waste, I had to conclude.

I found these thoughts to be discouraging. Then I said a solemn and polite goodbye and went home to my own house, and I prodded the loam I just planted bluebells in, and stirred the cold rain-water in the rain-barrel with my hand, and took a big long drink of it as well, and found it delicious, and then reclined myself upon some soggy moss and got all wet, and then I felt better, and ran inside to tell you all about it.
So here I am, HBBers, and I am hoping some of you will tell me that if you were to live in a giant dark forest you would not spread moss-killer and plant marigolds in ruler-straight rows.

Financial Times
Data warn against grasping at green shoots
By Krishna Guha in Washington
Published: April 14 2009 19:01 | Last updated: April 14 2009 19:01

Tuesday’s news that US retail sales fell 1.1 per cent in March is a blow to the idea that green shoots in the world economy herald the start of recovery.

The report is still consistent with the idea that the rate of decline has slowed from the precipitous pace seen in the final months of 2008, when it looked as if the world economy was falling off a cliff.

But it offers a reminder that the economy could continue to decline at a slower pace for some time and that the shape of the eventual recovery remains uncertain. There remains a risk of an extended period of weak growth punctuated by periods of contraction, as seen in Japan in the 1990s.

“The sense of a ball falling off the table,” is drawing to a close, Lawrence Summers, director of the White House National Economic Council, said last week. But “how strong, how rapid the turn will be – that is a less clear question”.

Now here’s an asset I wouldn’t mind seeing the guvmint seizing before something bad happens:

http://www.bloomberg.com/apps/news?pid=20601109&sid=aNJJYNBs1rQA&refer=home

Mortgage lenders have reached the acceptance phase of the housing bubble stages of grief.

Wall Street Journal
* BUSINESS
* APRIL 15, 2009

Banks Ramp Up Foreclosures
Increase Poses Threat to Home Prices; Delinquent Borrowers Face New Scrutiny

By RUTH SIMON

Some of the nation’s largest mortgage companies are stepping up foreclosures on delinquent homeowners. That will likely lead to more Americans losing their homes just as the Obama administration’s housing-rescue plan gets into gear.

J.P. Morgan Chase & Co., Wells Fargo & Co., Fannie Mae and Freddie Mac all say they have increased foreclosure activity in recent weeks. Those companies say they have lifted internal moratoriums which temporarily halted foreclosures.

Some mortgage companies had stopped foreclosing on borrowers as they waited for details of the Obama administration’s housing-rescue plan, announced in February, which provides incentives for mortgage companies and investors to reduce borrowers’ payments to affordable levels. Others had temporarily halted foreclosures while they put their own programs in place, or in response to changes in state laws.

Now, they have begun to determine which troubled borrowers are candidates for help, and to move the rest through the foreclosure process.

Colleague at the office today told me he took out an ARM loan for a house in Florida back in 2005. He said that sometime later his rate was getting reset and he was going to have to pay 10%. Problem: His house value plummetted too much that he could not refinance to a fixed mortgage. So he sold his house for a big loss and got out from under it.

This is the first in-person info I heard of about someone getting out from under an ARM reset in a rapidly depreciating asset.

The foreclosure tsunami crest has reached Rancho Bernardo. Maybe home prices will finally drop to affordable levels after the market is sufficiently deluged with foreclosure homes.

Notice how the article attests to the role of government intervention in dragging out the duration of the housing crisis. Consequently, there may be a backlog of hundreds of thousands of foreclosure homes waiting to hit the California market. DON’T BUY YET!

North County Times
HOUSING: Mortgage defaults hit new high, spread to upscale neighborhoods
By ZACH FOX - Staff Writer | Tuesday, April 14, 2009 4:12 PM PDT ∞

Mortgage delinquencies hit a new high in March, suggesting that foreclosures will continue to weigh on home prices through the year, according to a report released Tuesday.

The report also showed that notices of default, the first step in the foreclosure process, have spiked in the region’s tonier neighborhoods —- places that, until now, have avoided the mass foreclosures elsewhere —- while appearing to have reached a plateau in lower-end regions, which have already been hammered.

In fact, areas such as Valley Center and Rancho Bernardo shot up to be among the leaders in North County for most foreclosure notices per 1,000 houses.

The number of North County and Southwest Riverside County homeowners who received default notices on their mortgages in March reached its highest level since the housing recession that began in 2005, reported ForeclosureRadar, a Northern California research firm. Yet, lenders foreclosed on the fewest number of homes in more than a year.

The contrasting indicators suggest that banks were taking longer to foreclose. Sean O’Toole, the founder of ForeclosureRadar, said that as default notices pile ever higher, the stalled foreclosures will translate to a delay in recovery for the region’s struggling housing market.

Stalled foreclosures, the result of government intervention and bank attempts to modify loans, are “only delaying the problem,” O’Toole said.

As a result, there are tens of thousands —- maybe hundreds of thousands —- of foreclosures across the state poised to hit the market but have yet to, also known as “shadow inventory.”

California sees record foreclosure starts
Auction sales down, but defaults spike in March
By Inman News, Tuesday, April 14, 2009.

Lenders started foreclosure proceedings on a record number of California homes in March, even as sales at auction fell dramatically, data aggregator ForeclosureRadar reported.

The number of California homes subjected to notices of default — the first step in the foreclosure process — surged 29.3 percent from February to March, to 54,268, the company said. That’s a 26.3 percent increase from a year ago, and 25.8 percent above the April 2008 peak.

Notices of trustee sale — formal notice that an auction date has been set for a home — were up 82.3 percent from February to March and 19.6 percent from a year ago, but 15 percent below a July 2008 peak.

Some 10,040 homes were sold at auction in March, ForeclosureRadar said, marking a 41.4 percent decline from February and off 36.6 percent from a year ago. Banks take back the majority of properties that go to auction, but about 11 percent of auction sales were to third parties.

Sacramento in top 10 for foreclosure notices
Sacramento Business Journal

Almost one of every 2,000 people in Sacramento County faced a foreclosure sale in March, 31 percent better than in February, according to industry-tracker ForeclosureRadar.

Sacramento County, which ranks No. 10 statewide, had 2,789 default notices last month, the first step in the foreclosure process for financially strapped homeowners. The county had 1,910 notices of trustee sales and 716 foreclosure auctions/sales last month, as the hard-hit housing market continues to reel from the recession.

Tuesday, April 14, 2009, 10:20am PDT | Modified: Tuesday, April 14, 2009, 1:54pm

Washington unemployment rate jumps to 9.2 percent
Puget Sound Business Journal (Seattle)

Washington’s unemployment rate jumped to 9.2 percent last month from 8.3 percent a month earlier, which is the third straight month the state unemployment rate rose by .5 of a percentage point or more.

State officials said there was no significant job growth in any major industry or sector.

The state’s unemployment rate is now significantly higher than the national rate, which was 8.5 percent in March. In Seattle, the unemployment rate rose to 8.1 percent last month from 7.6 percent in February and 4.2 percent in March 2008.

In the state, there are now 327,400 unemployed people, up from 293,800 in February and up from 165,200 in March 2008.

Over the past 14 months of the recession, employers in Washington have shed 102,200 jobs, or 3.4 percent of the work force, a further sign that this recession is one of the most severe since the Depression.

The first quarter of 2009 has been dismal on the job front. It’s the largest three-month increase in the state unemployment rate since the state started compiling comparable data in 1976, according to state employment officials.

“Prior to the last three months, we have never seen it jump that high,” said Mary Ayala, the state’s chief labor economist.

Boy are those green shoots hard to see in the unemployment data!

Monday, April 13, 2009, 11:22am PDT | Modified: Monday, April 13, 2009, 11:56am
Oregon unemployment hits 12.1 percent
Portland Business Journal

Oregon’s seasonally adjusted unemployment rate rose to 12.1 percent in March from a revised 10.7 percent rate the state reported in February.

Oregon could have the highest unemployment rate in the nation. The federal government will release updated unemployment statistics on Friday. As of last month, Michigan led the country with an unemployment rate of 12 percent, according to the U.S. Department of Labor. South Carolina was second, with an unemployment rate of 11 percent. Oregon had the third-highest percentage.

The state lost 14,000 jobs last month after losing 22,800 in February. The state’s rate has now risen in each of the last 14 months. The January 2008 rate was 5.3 percent.

More than 256,400 Oregonians were unemployed last month, compared to 115,629 a year earlier.

“Unemployment in Oregon has more than doubled since last summer and while that creates enormous budget challenges for the state, we can’t lose site of the fact that 12.1 percent unemployment represents 256,000 real people,” said State Sen. Peter Courtney, the Senate’s president, in a statement. “Runaway unemployment has created anxious times for families all across Oregon, and not just for people who have lost their jobs. Families who are struggling to make ends meet now are also burdened with the worry that their job could be the next one cut.”

SF Chronicle
State revenue falls far short of projections
Wyatt Buchanan, Chronicle Staff Writer
Tuesday, April 14, 2009
(04-14) 04:00 PDT Sacramento –

In another sign that the California government’s money problems appear to be deepening, two reports show that the state’s revenue in March fell hundreds of millions of dollars short of estimates in the 2-month-old budget.

The reports come as Wednesday’s income-tax filing deadline looms, perhaps the year’s most important week for revenue in the state - when more than a billion dollars a day can flow into state coffers.

“These numbers clearly reflect the fact that we are working our way through the most significant economic downturn in years,” said H.D. Palmer, spokesman for the California Department of Finance.

The agency reported Monday that the state’s revenue was $415 million below what was forecast in the budget deal in mid-February. For the year, the budget is off by $737 million, according to the finance department.

Those estimates come on the heels of a report Friday from State Controller John Chiang that found revenue down $178 million for the month.

State officials said the numbers are reported in different ways, but they generally balance at the end of the year. The finance department reports receipt of money that has not yet been recorded by the controller, Palmer said.

The shortfall comes as unemployment continues to rise, new home construction is faltering and home prices continue to fall.

Don’t forget to file your taxes tomorrow, especially if you work for the Treasury Department

At tax time, cases like Geithner’s raise pointed questions
Some taxpayers — and even some in the IRS — resent what appears to be a double standard that favors powerful people like Cabinet nominees.
By Tom Hamburger and Ralph Vartabedian
April 15, 2009

Reporting from Los Angeles and Washington — The Treasury secretary, who oversees the IRS, initially didn’t pay all his taxes. Neither did five other top nominees for the Obama administration or their spouses. Now, as tonight’s tax deadline looms, some Americans are rhetorically asking: What would have happened to me if I had done the same thing?

The resentful reaction to such disclosures resonates not just among the anti-tax people organizing protests around the country today, but in low- and high-income neighborhoods of cities like Los Angeles — and even in the hallways of the Internal Revenue Service.

The most criticized example of nominees with tax problems has been Treasury Secretary Timothy F. Geithner, who owed $34,000 in payroll and Social Security taxes from 2001 and 2002, and didn’t pay all of it until Obama nominated him. But five other nominees had similar tax issues — as recently as two weeks ago, when Kathleen Sebelius, Obama’s pick to run Health and Human Services, admitted she had discovered she owed the Treasury $7,070 from 2005 to 2007.

“Our members are upset and angry,” said Colleen Kelley, president of the National Treasury Employees Union, referring to concern bubbling up inside the IRS over unusually strict rules that can cost IRS agents their jobs if they make a mistake, whereas Geithner and others are treated with relative leniency. In addition, the Geithner case is making the work of IRS compliance agents a bit harder, she said.

latest news
Hong Kong’s H share Index slides 1.6% in opening minutes

ECONOMIC REPORT
Australia’s leading growth index falls to 26-year low
By Myra P. Saefong, MarketWatch
Last update: 10:17 p.m. EDT April 14, 2009

TOKYO (MarketWatch) — A leading economic index for Australia fell in February to its weakest level in more than two decades, pointing to a possible heavy contraction for the nation’s economy, according to data released Wednesday.

The headline month-on-month rate contracted 0.3% in February from January to an annualized rate of 5.1%.

That result for the index, compiled by Westpac Banking Corp. and the Melbourne Institute, was the lowest level since September 1982, according to reports. The annualized rate, meanwhile, was well below the long-term trend of 2.9%.

The index is meant to signal the likely pace of economic activity in three to nine months into the future.

Westpac now expects the Australian economy to contract by 1% in 2009 — the first time it would do so since World War II, according to chief economist Bill Evans. But Westpac also predicted that will be the low point of the cycle.

But “the current rapid deterioration in the growth rate of the leading index points to downside risk for that forecast,” Evans said.

I suggest Goldman Sachs should be required to pay back their AIG jackpot winnings as a condition for repaying TARP monies.

Wall Street Journal

* REVIEW & OUTLOOK
* APRIL 15, 2009

The Goldman Two-Step
Freedom from TARP, but not exactly swearing off all federal help.

So Goldman Sachs now wants to repay its $10 billion in taxpayer capital, with its CFO even saying the Wall Street giant has a “duty” to do so now that it is once again turning a nice profit. Congratulations to Goldman on its desire to escape federal bondage. The question taxpayers might still ask, however, is whether Goldie is also willing to forswear a bailout when it next gets into trouble. Is it still “too big to fail”?

It is certainly a good sign that one of the bigger banks is eager and able to leave the clutches of the political class. The Washington crowd wants to hide its own role in the financial crackup — supereasy money, Fannie and Freddie — so it has taken to blaming the bankers, and the Troubled Asset Relief Program is its velvet truncheon. The sooner every bank can safely escape Barney Frank and Chris Dodd, the faster we can restore a capitalist financial system.

On the other hand, Goldman isn’t exactly swearing off all Beltway help. The firm has benefited enormously from the federal bailout, and many of our sources believe Goldman would have failed without it. Goldman denies this, claiming in particular that the firm had “no material economic exposure to AIG” at the time of the insurer’s collapse.

There’s no denying, however, that Goldman has been among the largest recipients of AIG cash since the bailout. Goldman is getting the same terms as AIG’s other counterparties, but the partnership of AIG and the Federal Reserve has been a lot nicer to Goldman than AIG was as an independent firm. Without a functioning AIG able to post additional collateral, Goldman might have struggled to hedge its AIG exposure. Instead, government-owned AIG, in cooperation with the Fed, has removed almost all of Goldman’s risk on its contracts with AIG.

Case-Shiller Housing Price Index & Futures (Bid) Prices for San Diego:

January 2000 = 100.0
November 2005 = 250.34 (150.34 percent increase in 6 years)
January 2009 = 148.25 (40.8 percent decline off the peak in 3 years)
August 2010 CME Futures Bid Price = 122.0 (17.7 percent further decline off January 2009 level)

Why would anyone buy a home now in San Diego when futures markets participants are predicting a double-digit decline over the next year? If the median now is $326,000, a 17.7 percent further decline would suggest you could buy the same house next summer for only (100-17.7)% * $326,000 = $268,000. There has never been a better time to keep on renting!